“Throughout history, it has been the inaction of those who could have acted; the indifference of those who should have known better; the silence of the voice of justice when it mattered most; that has made it possible for evil to triumph.”
Haile Selassie

Tuesday, March 18, 2014

Indianapolis Council Votes to Give Away $23 Million in Corporate Welfare; Next Up a Tax Increase for Public Safety

A proposal by Flaherty & Collins Properties to build an $81 million, 28-story apartment tower on part of the former Market
Square Arena site passed its last big hurdle Monday evening.

The Indianapolis City-County Council
voted 18-9 to provide up to $23 million in city financing for the
project, with the
stipulation that 30 percent of the workers
hired to build the tower live in Marion County.

...

The proposed Market Square Tower—if
it’s built as planned at
28 stories and 370 feet—will be one of the
10 tallest buildings in Indianapolis. It would rank as the tallest
apartment
building in Indianapolis.

The tower would include 300 luxury
apartments renting for $1,300 to $2,400 per month. About 500 parking
spaces and 43,000
square feet of ground-floor retail space
would be included. Flaherty & Collins said it prefers that a
specialty grocer
occupy the space and is pursuing Whole
Foods as a tenant.

Over at Advance Indiana, Gary Welsh outlines attempted amendments to the measure:

The only change made by council members was an amendment offered by
Councilor Vop Osili to shorten the repayment term for the $23 million
bond issue from 25 to 15 years. An amendment offered by Councilor Zach
Adamson to reduce the amount of the bond issue to $19.5 million, which
is actually the minimum amount the developer had indicated would be
acceptable, along with reducing the repayment schedule to 15 years was
rejected by a majority of the council members. Osili claimed his
amendment saved taxpayers $7.6 million, while Adamson's proposal would
have saved at least $14.7 million. Tonight's vote also paved the way for
the gifting of land on which the high-rise building will be built to
the developer worth at least $6 million.

Welsh picked up on the real reason this project was being financed by bonding instead of the City making the payments directly from the downtown TIF:

The discussion with the developer, David Flaherty, and the city's chief
economic development official, Deron Kintner, demonstrated the extent of
the ignorance of a majority of the council members. When Kintner was
asked why the City didn't just make the $23 million grant directly to
the developer rather than borrowing the money through the issuance of
bonds, he told council members that the downtown TIF district had
sufficient funds to pay the entire amount of the grant upfront rather
than borrowing it, but the administration thought it would be more
prudent to borrow the money because interest rates of about 5.5% were
too good to pass up. Not a single member asked a follow up question to
that response.

Kintner could not have been more disingenuous in his response. The
project is being driven by the law firm of Barnes & Thornburg, which
will earn hefty legal fees, along with other financial firms, which
contribute heavily to the politicians' campaigns. If there is no bond
issue, they don't receive their kickback for their share of the project
in consideration for their large campaign contributions. An equal
concern of Kintner is making sure there is more money laying around in
reserves so the city's bond bank can issue even more bonds to fund
future outrageous public giveaways like the one witnessed at tonight's
council meeting.

While our Council is bestowing the $23 million on a politically-connected developer to building luxury apartments on one of the most expensive pieces of real estate in the City, which property we are simply giving to the developer, the Council is about to take up a local tax hike to fund public safety. The priorities of this administration continued to be skewed toward handing out corporate welfare to politically-connected companies while sticking it to hard working men and women who continue to see their taxes raised to fund the giveaways.

About Me

I have been an attorney since the Fall of 1987. I have worked in every branch of government, including a stint as a Deputy Attorney General, a clerk for a judge on the Indiana Court of Appeals, and I have worked three sessions at the Indiana State Senate.
During my time as a lawyer, I have worked not only in various government positions, but also in private practice as a trial attorney handing an assortment of mostly civil cases.
I have also been politically active and run this blog in an effort to add my voice to those calling for reform.